Magna executives have warned that lenders could call in virtually all of its debt if it misses payments to banks and others. Magna has more than $600 million in debt, according to documents filed with the Securities and Exchange Commission.

The loan due today is a $40 million credit line from the Bank of Montreal. Magna has received at least eight extensions on that loan. But this marks the first payment due since a reorganization plan involving its controlling shareholder dissolved last month.

The Canadian company, which hopes to put slot machines at Laurel Park, hired debt restructuring and Chapter 11 bankruptcy consultants last fall. And Magna said last week that it defaulted on a loan tied to Pimlico, Laurel and the Maryland Jockey Club because it hadn't met certain financial covenants.

Though PNC Bank has yet to take action on that loan, it can do so at any time. And Magna's stock is scheduled to be delisted from the Toronto Stock Exchange April 1 - its shares trades for pennies on the Nasdaq.

When asked whether the company would file for bankruptcy protection, Magna chief executive Frank Stronach said in a brief telephone interview from Europe last night that SEC rules prevent him from making statements about future actions. But he said, "I will do everything I can do to see that racing will get on a healthy footing."

Magna owns Santa Anita Park in Southern California and Gulfstream Park in Southern Florida, among others. And Baltimore's Pimlico is host to the Preakness Stakes, the second leg of the Triple Crown.

A source familiar with the situation told The Baltimore Sun that Maryland Jockey Club employees were paid yesterday, two days ahead of their regular Friday payday. And sources told the Los Angeles Daily News that Magna employees had been told to turn in their timecards last Monday and were scheduled to be paid yesterday or today.

Companies typically pay employees before filing for bankruptcy protection because subsequent payments must be approved by a judge. Magna outlined its difficulties late last year to the SEC, saying any defaults could trigger a series of loan payments unless it obtains waivers or extensions from lenders.

"If we are unsuccessful in our efforts, we could be required to liquidate assets in the fastest manner possible to raise funds, seek protection from our creditors in one or more ways, or be unable to continue as a going concern," Magna said.

Shares of Magna lost 9 cents to close at 20 cents yesterday.

"Basically, it's trading as if the company is a defaulted stock," said Jeff Hooke, a Bethesda-based investment consultant who analyzes gambling issues.

Magna has lost $638 million since 2002.

"A picture has been emerging for a long time that they're struggling badly to meet their obligations," said Timothy Capps, a former Maryland Jockey Club official who is now executive-in-residence at the University of Louisville's Equine Industry Program.

During the past several years, Magna survived on cash infusions from its controlling shareholder, MI Developments, and Stronach, founder and chairman of both companies.

But last month, MI Developments abandoned its latest reorganization plan to separate itself from Magna. As a result, the due date on about $275 million in debt owed by Magna to MID was accelerated to March 20. Part of the money that MID lent to Magna was supposed to be used for slot machines at Laurel. Magna is locked in a legal battle with Maryland over its disqualified slots bid.

One MID shareholder, San Francisco-based Farallon Capital Management, said last week that MID should foreclose on Magna's debt if it is not repaid on March 20.

Officials at the Maryland Jockey Club, the umbrella organization for Pimlico and Laurel, referred questions to Magna.

John Franzone, chairman of the Maryland Racing Commission, said bankruptcy might not be the best option for Magna.

"Racing entities are tied into their respective racing commissions, regulations and state laws," he said, noting that Stronach is known for getting out of sticky situations. "Unlike a private business that files for Chapter 11, it's much deeper than that."

If Magna files for bankruptcy protection, racetracks will continue to operate, said Richard Hoffberger, president of the Maryland Thoroughbred Horsemen's Association.